Company to spend A$125 million to boost competitiveness of locally produced food and food ingredients.

BakingBusiness.com,
2/13/2014

by Eric Schroeder

SYDNEY, AUSTRALIA — GrainCorp Ltd. has earmarked A$125 million ($113 million) toward strengthening its Australian edible oils manufacturing operations. The investment will boost the competitiveness of locally produced food and food ingredients against imported products, and deliver improved environmental performance, the company said.

“This project involves creating a strategic hub within Victoria that is located far closer to key oilseed growing regions,” said Sam Tainsh, group general manager for GrainCorp Oils. “It delivers a logical and more efficient focal point for the sourcing, crushing, refining and distribution of our locally produced edible oils and food ingredients. This is our A$125 million vote of confidence in Australian food manufacturing at a time of uncertainty for many manufacturers in the country.”

GrainCorp said the consolidation of the edible oils refining and packing operations includes:

• An expansion and upgrade of GrainCorp Oilseeds operations in Numurkah to include vegetable oil processing capabilities.

• An upgrade at GrainCorp Foods facility in West Footscray, Victoria, to include additional capability, including retail spreads, bakery fats and shortenings.

• A shuttering of operations at the company’s operation in Murarrie, Queensland, in early 2016, with transfer of operations to Numurkah and West Footscray.

The project will affect 130 jobs at the Murarrie plant but will create 44 new jobs at the expanded plans in Numurkah and West Footscray. The additional economic activity in the regions also is expected to account for up to 400 new indirect jobs, Mr. Tainsh said.

“The priority for us is giving our people in Murarrie as much certainty and ability to plan ahead as possible,” Mr. Tainsh said. “That’s why we have informed our people over two years in advance. Where possible, we will seek to redeploy affected staff to other parts of our business. Where redeployment is not possible, we will provide comprehensive training and assistance to find new employment.”

The A$125 million investment is part of a larger initiative under way at GrainCorp to deliver an additional A$110 million per year of incremental underlying EBITDA by fiscal 2016. It is a significant component of the “Asset Optimization” initiatives, and is expected to contribute about A$22 million per year of underlying EBITDA once commissioned.